Rule 34 of the Employment Appeal Tribunal Rules 1993 states that if the Appeal Tribunal allows an appeal, in full or in part, it can order the original claimant to pay some or all of the appeal fee. In Look Ahead Housing and Care Ltd v Chetty and Eduah, the Employment Appeal Tribunal (EAT) held that employers should not be allowed to recover the fee if they could have pursued a different option before issuing a notice of appeal.

Basic facts

Ms Chetty was the deputy manager and Ms Eduah was a care assistant at a charity providing residential facilities for local people with mental health problems. On the morning of 1 March 2010 Ms Eduah went to oversee one of the residents take her insulin. She was supposed to fill in a form recording what the resident had taken, but as none was available she gave the insulin to her anyway.

The next day, the manager told Ms Chetty to get hold of and fill in a form, indicating that the resident had had the appropriate drug. This was a breach of procedure as it should be signed by the person who administered it. The manager (who was white) was not disciplined but Ms Chetty and Ms Eduah were dismissed. They brought claims of race discrimination.

Tribunal decision

The tribunal found in favour of both claimants and ordered the charity to pay Ms Chetty compensation for the loss of salary she had suffered, plus a sum for injury to feelings. It also awarded Ms Eduah a lump sum (but deducted 35 per cent by way of contributory fault) as well as a sum for injury to feelings.

The charity appealed on a number of grounds. These included an argument that the awards were unusually high; that the tribunal had omitted to take account of the earnings Ms Chetty had received in her new employment; and that she had failed to mitigate her loss. It also argued that the tribunal should have awarded more than 35 per cent by way of deduction for contributory conduct and that it awarded Ms Eduah too much for injury to feelings.

EAT decision

The EAT rejected all the arguments in respect of Ms Chetty, apart from agreeing that an adjustment was needed to reflect the salary she had received since she was dismissed. It also rejected all the arguments put forward in terms of the compensation awarded to Ms Eduah.

The employer then asked the EAT to make a costs order under rule 34 on the basis that they had succeeded in their appeal (albeit only partially), whereby Ms Chetty should be ordered to pay half the fees incurred by the charity in bringing the appeal. The EAT also rejected this application on the basis that the employer could have asked the tribunal to reconsider the question or simply approached Ms Chetty herself to sort the matter out before issuing a notice of appeal. As the charity could have avoided incurring a fee, the EAT refused to make an order for costs.

The EAT added by way of guidance that when an appeal is rejected entirely, the appellant will not be able to recover their fees. If it is partly successful, the amount the employer can recover “will depend upon the particular facts”, in particular whether it was necessary to incur the expense at all. Courts have to use their discretion reasonably when deciding whether to award the entire fee, or whether to moderate it to a reasonable extent, which includes making no award at all, although that is likely to be rare.